Underdog began offering drive-by-drive prediction markets on NFL games, a product its director of product said he believes is the first of its kind.
The launch comes weeks after the Commodity Futures Trading Commission paused micro contracts from Novig over manipulation concerns, and as several states weigh banning live betting at sportsbooks.
Underdog director of product Harry Raymond tweeted screen recordings of the new markets during Monday Night Football between the Bills and Vikings. The contracts resemble micro bets offered at regulated sportsbooks, including the result of the next drive and who will catch a pass on that drive.
“Excited to bring these fast-moving markets to more fans,” Raymond wrote. “Trust me, Monday Night Football has never been this fun.”
Micro bets and trades under scrutiny
Micro bets are a form of prop bet that focus on short sequences in a game, such as the result of the next drive. Sportsbooks also offer micro bets on whether the next pitch in a baseball game will be a ball or strike, or whether the next play in a football game will be a run or pass.
The CFTC told Novig that its contracts on the first points scored in a basketball game were micro contracts susceptible to manipulation and should not be listed. ProphetX’s scorigami contracts, which pay out on a final score that has never happened before in a sport’s history, did not meet the Commodity Exchange Act’s definition of a swap, according to the agency.
LSR asked the CFTC whether it views Underdog’s new markets as micro contracts and, if so, whether it would ask the exchange that lists them to pause or remove the contracts. The CFTC did not immediately respond.
Lawmakers in several states have pushed to ban micro bets at sportsbooks. In New Jersey, S2160, which would eliminate such wagers, advanced out of committee in March but hasn’t moved since. Sen. John McKeon said he was “over the top disturbed” after hearing about problem gambling tied to micro betting.
Pennsylvania state Reps. Tarik Khan and Jamie Flick introduced bills that would also ban micro bets and go a step further by limiting same game parlays on props. A bill in New York would end all live betting, while an Ohio bill would ban live betting as part of a broader push to eliminate online sports betting. Neither has advanced out of the House or Assembly.
Prediction markets face fewer safeguards
Prediction markets are not required to follow the same consumer protections as state-regulated sportsbooks. One of the most criticized differences is age. Most states require sports bettors to be 21, while prediction markets generally allow users as young as 18.
Regulated sportsbooks are required to offer responsible gambling tools such as deposit limits, cooldown periods and self-exclusion. Prediction markets do not face the same requirements, though some have added similar tools on their own.
Sports leagues also work with their sportsbook partners to restrict bets they view as threats to the integrity of their games.
In October, the NBA’s betting partners stopped offering parlays combining multiple unders on the same player’s statistics, bets on opening tips and certain individual plays, and unders on players expected to play fewer than 12 minutes. The rules did not extend to prediction markets, even though the NBA announced partnerships with several of them later that month.
The NFL has pushed prediction markets to drop what it calls “objectionable” bets. In an amicus brief filed with the Supreme Court, the league said the CFTC and exchanges have stuck to “a more laissez-faire approach” instead of adopting the safeguards required in state-regulated betting.
Khanna joins calls for a ban
Prediction markets also drew criticism from Congress on Tuesday. Rep. Ro Khanna (D-CA) posted on X that sports prediction markets are sports betting disguised as financial trading, arguing they flout state and tribal gambling laws, siphon state tax revenue and fuel addiction.
Khanna also said the markets expose young Americans to public health risks while evading state consumer safeguards.
“Congress must ban them,” Khanna wrote.
The post comes after Democrats took control of the House and Senate in last week’s midterm elections. Sports and gaming attorney Daniel Wallach told LSR a Democratic Congress could bring hearings, investigations and pressure on the CFTC, along with possible legislation.
Any bill limiting prediction markets would still need to get past President Donald Trump. Gambling law expert I. Nelson Rose said he expects Trump to veto such legislation, pointing to Donald Trump Jr.’s investments in Kalshi and Polymarket.
Lawmakers from both parties have already filed bills targeting the industry. Sen. John Curtis (R-Utah) introduced the Prediction Markets Are Gambling Act in March with Sen. Adam Schiff (D-Calif.) as a cosponsor. The bill would ban operators from offering sports event contracts.
Schiff posted on X last week that “sports prediction markets are sports bets.”
